THE LOGISTICS BLOG

Achieving Supply Chain Sustainability with Innovative Technology

Sustainability of an organization depends on three things: people, planet, and profit. Each factor needs to be regularly reviewed to determine if an organization is achieving sustainable actions. Focusing on the continuous improvement of sustainability's three factors will better position a business for long-term success.

What Does a Sustainable Supply Chain Look Like?

As mentioned above, people are a critical component of supply chain sustainability. Employees are the ones who promote change, seek it out, and practice it in everyday operations. Staff members are a huge asset to organizations, so it is key to attract and maintain a talented workforce that can make the company that much bigger, productive, and competitive.

The next factor of sustainability is one that is less considered by organizations—our planet. Analyzing a business' environmental footprint, reducing harmful environmental outputs, and producing goods that are environmentally friendly will all benefit our planet. As a side effect, initiatives like waste reduction and sustainability can bring with them cost savings, a better public image, and increased sales.

The last component of sustainability is profit. Without profit, businesses would cease to operate. Fiscal growth is always a priority for companies and should extend beyond short-term gains. Evaluating customer and business requirements will assist organizations with attaining long-term, sustainable growth. These three factors can all be complimented by innovative technology to deliver sustainability to businesses.

Implications of Using Innovative Technology to Achieve Supply Chain Sustainability

With the addition of innovative technology into supply chain operations, there are a few negative implications that can appear. The first is an increase in technical complexity. New technology has a learning curve that must be overcome, meaning employees must have new and improved skills to operate and work alongside it.

Labour demands may also lessen with the adoption of innovative technology, decreasing employee costs. The personal lives of employees must be taken into consideration, though. Job loss can be detrimental, as an employee's well-being and standard of living could be greatly impacted.

Lastly, inadequate policies and regulations exist, hindering the potential these technologies possess. This creates uncertainty and reduces investment opportunities. Knowledge gaps would also allow for the unfair or unethical use of the technology. However, further research and more knowledge-based policies can prevent this situation.

The Reality of Innovative Technology Use in Supply Chains

While there are a few negative implications innovative technology may introduce, there are far more advantageous possibilities supply chains can capitalize on. Drones, additive manufacturing, and blockchain (to only name a few!) can be integrated into supply chains to increase productivity, adjust processes, and reduce operational costs.

Additive manufacturing, also known as 3D printing, is now being used in commercial environments to offer more customization to buyers, increased flexibility for businesses, and sturdier products. Additive manufacturing produces light-weight goods made by depositing layers from digital 3D design data. If analyzed on a sustainability scale, this technology ranks high for people, planet, and profit. The option for customization increases profit, and the ability to create products from several different materials benefits the planet. As for people, additive manufacturing technology would require employees to learn new operating skills.

Drones are also finding their way into supply chains for use in warehouses and last-mile optimization. Posing many benefits to supply chain players, drones can enhance the customer experience and perform several value-added tasks on company property. Regarding people, planet, and profit, drones also rank high. Employees are still needed to operate this technology, the planet benefits from reduced carbon emissions with last-mile deliveries, and companies profit from their inherent value.

This innovative technology has yet to be introduced full force into supply chains but is creating buzz with its numerous possibilities. At a high-level standpoint, blockchain is a record-keeping method that allows companies to safely and easily conduct business online. It acts as a digital ledger that records the movement of goods from one location to another throughout the whole supply chain. Sustainability-wise, blockchain impacts all three factors. This technology holds employees and, ultimately, businesses accountable through its tamper resistant ledger. It would also help companies reduce their environmental footprint by reducing the need for paper documents. Lastly, organizations can profit from blockchain by analyzing which processes need improvement.

Although the negative implications of innovative technology exist, their benefits outweigh the negatives. Yes, these technologies come with an increased technical complexity that will require more knowledge, but if companies invest in the training, they will see increased profits. Labour demand may decrease somewhat, but employees will still be needed to fly drones and operate 3D printers. When more research has been conducted on these innovative technologies and better regulations are in place, businesses can fully invest in them, become more sustainable, and observe fiscal and operational growth.